VBA Issues Bulletin Regarding Professional Indemnity Insurance
As a building or property owner, are your service providers, practitioners and contractors adequately covered by their professional indemnity insurance (PII)? Will the scope of your works be covered across the full range of liability?
The PII industry relies far too much on complacency. As such, many clients and practitioners may not be aware of the true extent of their cover. Much less their obligations to maintain their insurance and those of their contractors.
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Will your professional indemnity insurance ensure adequate risk coverage?
The Victorian Building Authority (VBA) released a bulletin earlier this month. The VBA announced its intention to ‘continue enquiries to ensure practitioners hold the required insurance.’ Thus, ‘requiring the production of evidence that surveyors hold PII policies that are compliant with the Ministerial Order (29 May 2014).’
This bulletin is particularly in response to ‘insurers limiting liability under PII policies for the use of non-compliant building materials.’ This comes in response to ‘an increase in claims against policies relating to the use of non-compliant cladding in building work.’
Insurance providers’ action puts both owners and practitioners in a difficult position. Their coverage effectively reduces concerning a very prescient issue affecting today’s industry. As a result, a reduction in coverage places organisations at risk of suspension until they can attain necessary coverage.
To assist you in identifying whether current policies are appropriate, we have identified 3 key criteria. You can use these key criteria to ensure that you or your contractor’s PII will provide a fully compliant and legally defensible position.
1. Will your project require extensions or additional coverage?
Contracted parties and practitioners may require domestic builder’s warranty insurance, construction insurance, or protected work insurance to cover necessary works. Additionally, this insurance considers site conditions and surroundings. Consulting with building compliance experts will assist in identifying which PII policies must be in place to guarantee compliance.
2. What is the scope of works required, and what is the level of inherent risk?
Different contractors, from construction workers to building surveyors, will require different levels of coverage. Identifying the unique requirements will help determine whether or not the correct PII is in place.
3. Are there any exclusions in their PII Coverage? Can this be adjusted?
As noted above, the reducing scope of coverage has placed a strain on asset owners and contractors to rectify gaps in their coverage where possible. Therefore, clients need to identify any existing or potential changes to their coverage with their current or prospective providers. Furthermore, clients must determine whether or not this will impact their ability to remain compliant and legally defensible.
Against industry trends, Hendry has not reduced the scope of our coverage regarding professional indemnity insurance.
We aim to give clients greater security and peace of mind. When you partner with Hendry, you can trust that services are of the highest possible standard. Thus, reducing the likelihood of potential indemnifying risks.
Naturally, we endeavour to factor these key criteria in our PII and the coverage of our practitioners and services. As a result, Hendry has maintained a record of zero fault claims against ourselves or our clients.